Instrument
Government bonds (CETES, Tesouro Direto, TES & peers)
Low–midWhat it is
You lend money to your own government and get paid interest. In high-interest-rate Latin American economies, this is often the best simple deal a beginner can find — low risk, low cost and, in Mexico and Brazil, buyable directly with no middleman.
How to buy it
Mexico: cetesdirecto.com, from ~100 pesos. Brazil: tesourodireto.com.br, from ~R$30. Colombia, Argentina, Chile and Peru: typically via a mutual fund or a regulated broker rather than a dedicated retail portal — see your country guide for specifics.
Pros
- Generally the lowest-risk instrument denominated in local currency
- Some versions are inflation-linked, directly protecting purchasing power
- Low or no fees where a direct government platform exists
Cons
- Still carries the credit risk of the issuing government, however small
- Selling before maturity can realize a loss if rates have risen since purchase
- Returns are modest compared to riskier instruments — that is the deal
A worked example
Buying a short-term bond like a 28-day CETES or a Tesouro Selic position is close to the calmest way to put idle cash to work at close to the policy interest rate, with same-country-government credit risk and daily liquidity in Tesouro Selic's case.
Frequently asked questions
Are government bonds risk-free?
No investment is truly risk-free. Government bonds carry the issuing country's credit risk (generally low for most Latin American sovereigns in local currency, but not zero) plus inflation risk on non-indexed versions. They are low-risk relative to the rest of the menu, not risk-free in an absolute sense.
Can I lose money on a government bond?
If you hold to maturity, you generally receive the agreed return. If you sell early and rates have risen since your purchase, the bond's market price can be below what you paid — a real, if usually modest, loss.